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Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

The future of the music business is here

I have been poking around AllofMP3.com, a Russian music site with a huge catalogue and an excellent interface and even better prices (a typical track can be downloaded typically for around 12¢). The way the system works is you pay ‘by weight’ of the music file: the tracks are coded-to-order to your exact specifications via a vast CD jukebox, thus if you download an mp3 file with a bit rate of 192 (excellent sound quality), you will pay more than if you download the same file in smaller size at a bit rate of 64 (fairly crappy sound quality). The system can be accessed either via a web front-end or an excellent browser application.

It occurred to me that I more or less stopped buying music CD’s about eight years ago and went from someone who maybe once dropped $2000 per year on music to someone who spent pretty much nothing. Yet in the last month, I have spent $70 at AllofMP3.com because the service is good (and secure: they use Chronopay who are totally above board), the interface is intuitive and the price per download makes hunting around fly-by-night peer to peer networks simply not worth the hassle. I have no pecuniary interest in this operation (sadly) but I cannot recommend them highly enough.

This is the future of the music business and it does not matter a damn whether or not Sony or BMG like it. It is here and it works really well.

Music business: adapt or die… music buyers: enjoy like never before!

38 comments to The future of the music business is here

  • COD

    I believe here in the US the RIAA claims it is illegal to buy music from that site. Not that I believe a word they say – but…

    In my limited fooling around with the site and downloading a few test files, I was quite impressed.

    My biggest fear with them has been handing over my credit card to number to a site in Russia. I’ve been meaning to see if a VISA gift card would work there.

  • I’ve been using AllOfMP3 for over a year now, and I’ve been really happy so far. I too was a bit hesitant to enter my credit card number on a Russian site, but I haven’t had a single problem. Overall, it’s been well worth it. I’ve filled up my 40-gig MP3 player a few times over for a lot less than I would’ve had to pay anywhere else, and there’s none of that nasty DRM to deal with. Someone’s selling it for a price I can deal with, and I can use it however I like. Can’t ask for much more.

  • Julian Taylor

    And the other great thing about AltoMP3 is that it can remove Apple’s DRM restrictions – so a single that you have bought actually becomes your own!

  • Julian Taylor

    Oops, read that as AltoMP3, instead of Allofmp3. Apologies all round (not trebles as C.Kennedy might say).

  • jk

    Hate to spoil the party. If the RIAA doesn’t dig it, there seems a good chance that the artists or composers are not being compensated.

    Do we not care about property rights when we’ve found a convenient way to steal?

    Disabuse me if I’ve missed something

  • Katya V

    The site is legit and they totally rock!

  • Do we not care about property rights when we’ve found a convenient way to steal?

    One might argue the record labels are stealing from us (i.e. artificially high prices)? I do share your concern that the artists won’t be compensated in this instance.

  • AllofMP3 is legal. In Russia.

    This is due to the extremely weak Russian copyright coverage. It is not (in their own words at their own site) legal for them to sell to you in a country with stronger copyright coverage that conflicts with bootlegs.

    So no, it’s not legal for someone in London, England to download those cheap bootlegged MP3s from AllofMP3.

  • Dealerman

    The price of the product (music) has been bid down by the market and any attempts to force it back up are doomed to failure. The old model for the music industry is dead and the sooner people deal with that, the better. The article is right, this IS the future of the music business and it cannot be wished away.

  • RAB

    The folks who havent been mentioned much in this thread are the musicians.
    I think they could cut out all the middleman stuff with record companies, who have always ripped off the artist ,and go direct.
    Like the porn industry they could give out a couple of tracks as free samples and then if you wanted the whole album, well buy it from them at a cool price for you …and them.
    It makes TOTP a thing of the past , but then it already has been for decades.

  • jk

    I completely agree that an mp3 long-tail market for music is the future. Most sites I would’ve shut up but this seemed a place where folks would respect preoperty rights. And I just don’t believe that Bucky Pizzarelli is gonna get much of that 12c.

  • GCooper

    jk writes:

    “Do we not care about property rights when we’ve found a convenient way to steal?

    Disabuse me if I’ve missed something”

    You mean aside from the indisputable fact that record companies habitually lie, steal from and cheat the artists whom they exploit?

  • Hank Scorpio

    “You mean aside from the indisputable fact that record companies habitually lie, steal from and cheat the artists whom they exploit?”

    Immaterial. When you’re “buying” music from AllofMP3 you’re not compensating any of the people who put that music together. More than likely you’re compensating the Russian mafia.

    Now do I really have too many problems with people stealing from the RIAA? No. I’ve done it myself. That doesn’t change the fact that what you’re doing is stealing, regardless of whatever bullshit excuses you come up with.

    If you’re going to be a thief, be a thief. Don’t equivocate with “But the RIAA is bad too!” At the very least download music off of a torrent and don’t enrich Russian criminals involved in drugs, forced prostitution and gun running.

  • GCooper

    Hank SCorpio wrotes:


    Immaterial. When you’re “buying” music from AllofMP3 you’re not compensating any of the people who put that music together. More than likely you’re compensating the Russian mafia.”

    Really? You’re sure of that? You can prove it?

  • Hank Scorpio

    Can I prove that AllofMP3 is run by organized Russian crime? No. Do I have reasonable suspicions that at the very least they’re kicking money to the mafia, especially considering the levels of corruption in Russia? You betcha.

    I can, however, prove that AllofMP3 is in no way connected to any recording studio, so they’re selling you product that isn’t theirs to sell. As I said before, if you’re going to steal, at least have the balls to steal something yourself rather than relying on a shady middleman while cloaking yourself in some half-assed cloak of “legitimacy”.

  • GCooper

    Hank Scorpio writes:

    “Do I have reasonable suspicions that at the very least they’re kicking money to the mafia, especially considering the levels of corruption in Russia? You betcha.”

    And you expect me to give the proverbal flying one when Sony BMG was busted for a $10 million payola scam in 2005? When record company after record company has been fined for defrauding its artists of royalties, totalling millions of dollars?

    The sooner the entire record industry collapses under its own bloated weight, the better. And, the sooner music publishers and the entire corrupt business of government-enforced ‘rights management’ was wound-up, the better.

    And if it takes the tender ministrations of the Russin Mafia to bring that on, so be it.

    How refreshing, though, to hear a Leftie defending the same corrupt monopolistic businesses you chaps normally like to campaign against!

  • Do I have reasonable suspicions that at the very least they’re kicking money to the mafia, especially considering the levels of corruption in Russia? You betcha.

    And your supposition is based on what? I hope it is not simply that allofmp3.com are a Russian company!

  • AllOfMp3.com pay the Russian equivalent of ASCAP/BMI (ROMS), just like radio stations do. And it’s at worst a gray-market importation into the US at most jurisdictions.

    So yes it appears legal, and yes the record companies/artists will get some small trickle down payment depending on who gets downloaded more. Just like with how the ASCAP royalties in the US are proportional to who is on the radio the most.

    Don’t forget that artists make almost nothing from album sales. And that the record companies are just really, really upset that digital distribution has taken a lot of the artificial profits out of their business. They hate that people buy songs at a dollar a pop from apple rather than buying a whole album just to get two songs off of it.

    Here’s my presciption for them all to make more money, which would make most people not need to seek out grey-market things like allofmp3:

    1) Forget about DRM (it’s just a monetary and goodwill cost)

    2) Leave their normal marketing and production machinery completely untouched

    3) Completely embrace free page/minute/whatever is appropriate for the media samples of work as teasers

    4) pay artists a much larger fraction of the revenue stream, which has now roughly doubled

    (it’s now quite a bit bigger as the production and distribution bill is half picked up by the consumer on their monthly ISP bill, AFTER you get done with that order of magnitude cost reduction in half of the publishers cost structure!)

    5) Artists are now MUCH happier, as they get a far huger check per number of readings/views/listens, and the number of copies you need to sell to make a living full time engaged in their art is lowered a BUNCH.

    6) Studios and publishers are now MUCH happier, as they have a LOT more slack for a) paying artists, b) profits, c) lowering prices.

    7) Consumers are now MUCH happier, as they will pay less for a wider selection of higher quality media.

    -David Mercer
    Tucson, AZ

  • Chris Harper

    Sheesh,

    Sorry guys, but Hank is right. Whether you approve of the morality of the western music business or not, the goods belong to them and the artists. One of the driving principles of this site is respect for property rights, not glorifying those who steal, whether it be the state or someonn else.

    If you thionk music costs too much then the answer is simple. Don’t buy it. Or encourage other, honest, means of distribution.

    As far as Perrys question goes –

    And your supposition is based on what? I hope it is not simply that allofmp3.com are a Russian company!”

    The answer is ‘yes’.

    The sun is hot, the sky is blue, rain is wet and Russian companies are expected to pay a tax to the local mafia.

    This isn’t racism against Russians, just recognition of the facts on the ground. Ask Tim Worstall why he conducts business with Russia from Portugal.

  • Sorry guys, but Hank is right. Whether you approve of the morality of the western music business or not, the goods belong to them and the artists.

    Nope, you have that exactly the wrong way around. Like it or not, music is now a commodity that is traded by wieght in an international market. The model allofmp3 use does indeed pay something to the creators of the music and refusing to accknowlage that things have changed is pointless.

    It may not be the business model originally envisaged by the music creators but that is the only viable one that remains to them. The market price for their product is now about 12¢ a track and if that (or their cut of that) is not enough for the music’s creators, well I guess they should stop producing music and go find something else more profitable to do just as if the price of diamonds falls too low, De Beers should feel free to stop digging them up in Namibia. What they (and De Beers) should not feel free to do is demand governments force the price of music (or diamonds) up by insisting they can only be sold a certain way via approved technologies at higher prices.

    One of the driving principles of this site is respect for property rights, not glorifying those who steal, whether it be the state or someonn else.

    And another principle is trying to develop theories about the world that reflect reality. The market has spoken (loudly) and using the state to prop up a business model that technology has made nonsensical is not really serving the cause of liberty either.

    Also, clearly the ‘Russian Mafia’ angle is baseless supposition. Still, even if it was true (evidence = zero) the Russian Mafia fulfils certain roles that in other countries are filled by governments and lobbyists to much the same effect, thus I am not sure it makes a company like allofmp3 any different to a company (say Sony) using the force of th state to enfore its business model.

  • I wouldn’t say that they are necessarily paying the Mafia. They definitely have a “krisha” or roof. Everyone does. Might be the Ministry of the Interiror, might be a Scientific Institute (as ours is), might be the Lyubertsy (fascist bootboy gang, although perhaps unlikely as they are not likely to understand something like this).

    Mafia and krisha are not quite the same thing, although if you don’t have a krisha you will get the Mafia.

    Paying the equivalent of ASCAP/BMI (so needle time or broadcasting rights) sounds like a pretty neat idea. None of that will go to the musicians though, such rights accrue to the songwriters, at least in the UK.

    I’m a little out of date with this but there was a time when Radio 1 paid 35 quid to play each and every single.

    But this wouldn’t get past the PRS rules here. By changing the format (ie, CD to MP3) they cannot claim to be simply broadcasting. If they are streaming it (which I assume they are not) then they can, under PRS rules, simply offer up a %ge of revenue (12% was mentioned last time I spoke to them) but that change in format means they can’t.

    Might actually be worth someone having a proper look at the law in this area, see if it’s worth getting a PRS licence and seeing if something can be done, not sure how the law has changed recently.

  • “One of the driving principles of this site is respect for property rights, not glorifying those who steal, whether it be the state or someon[e] else.”

    I agree that the statement is factually correct, but you seem to be assuming that intellectual property is a valid form of property at all. I’m frankly undecided on that score, despite being a knowledge worker myself.

    To the extent you are endorsing state enforced copyright and legal protection for DRM then perhaps you have not considered the impact that can have on the physical property that you own. i.e. the fact that DRM laws remove control from you over that property and turn your property into an active agent of the content owner (or even the state).

  • “Like it or not, music is now a commodity that is traded by wieght in an international market.”

    Perry, there is no “trade” to it at all if anything about it is conducted without the expressed sanction of people with original rights to the material at “trade”. You’re posing the matter as a fait accompli that everyone should just shut up and live with, but if I’m a music producer, I’m having big problems with a lot of it.

    Look: such flat assertions of commodity pricing strike me as just ridiculous. Consider that nobody on the whole planet is going to pay me 12¢ a track for anything that I’ve recorded: it may be a drastic undervaluation of my work, but I seriously doubt it, and especially if one of my songs were attempting to compete with anything able to see the top of traditional markets as they’ve come down to us so far. And one thing that this means to me is that anything like the latter that comes to a new digital market at 12¢ is undervalued to the point of there being something seriously wrong, somewhere. I believe that anyone who believes that any song off Mariah Carey’s new record could do no better than 12¢ a download has rocks in their head. (disclaimer: she’s never made a dime off of me and never will, but it should obvious that I don’t count when it comes to her success.)

    Now, I should think that the example of the difference between my marketability and Carey’s would make anyone think twice about “commodity” pricing of music.

    …except, perhaps, people who’re offering the commodity at 12¢ per track.

    I’ll put it this way: if I were a marketable American artist, I wouldn’t hold my breath waiting on checks from Russia. I could be wrong.

    In any case, I think it’s a sad day when cheerleading advancing technology has to resort to equivocations like those rife in your final paragraph.

    Dave Mercer: your seven points are generally pretty good, I think. However, point two (“Leave normal marketing and production machinery completely untouched”) is somewhat bemusing, because part of that machinery, right down to the present day, includes the clots of accountants and attorneys where A&R departments used to thrive. The damage that they’ve done since 1976 (I date this rot to their sharpening to marketing phenomena in the wake of Frampton’s live album) is evident today in, for example, the reduction of R&B to purely formal vocal acrobatics.

    To my mind, the very foremost best thing about new marketing and distribution techniques is the prospect that all those bastards will be driven out to the wilderness that they deserve. That’s because talent that would not have seen the light of day under their regime will not be subject to their dull arbitrarity, perhaps being rejected by the market at large instead of some slug who never gave a shit about music to begin with.

  • jk

    Perry, there is no “trade” to it at all if anything about it is conducted without the expressed sanction of people with original rights to the material at “trade”.

    That’s what got me whining toward the top of this thread. I don’t know about the mafia but it is reasonable to suspect that a Russian site that sells product at an 87% discount to iTunes and opposed by the RIAA is not paying artists and composers.

    I have a few CDs out, which billions of consumers all over the world have decided are not worth $15 (free mp3s(Link) as well if any of you like jazz). I have sworn off pirated music on principle.

    Yes the current scheme is broken. I will plug emusic.com: $9.95 gets you 40 legal, unprotected downloads a month. Great Jazz selection, I doubt Eminem and Madonna fans will be as happy.

  • “To my mind, the very foremost best thing about new marketing and distribution techniques is the prospect that all those bastards will be driven out to the wilderness that they deserve. That’s because talent that would not have seen the light of day under their regime will not be subject to their dull arbitrarity, perhaps being rejected by the market at large instead of some slug who never gave a shit about music to begin with”.
    Totally agree with you on this Billy. Now that music can be distributed so cheaply – internet – the vast sums that ised to be needed are now moot. Surely more money can go to the artists than to the fat comptrollers now? Ms Carey may still make a substantial sum from downloads at 12c per track but smaller acts will be left out.

  • gravid

    JK – nice stuff, love the vibes, man. Ta’.

  • Perry, there is no “trade” to it at all if anything about it is conducted without the expressed sanction of people with original rights to the material at “trade”.

    I do not much care of the “original rights” of the farmer whose hens laid the eggs I buy in the supermarket either because my deal is with the supermarket whose brings them to me. Ditto the music. If Allofmp3 can deliver the music I want to me, I am happy to pay them.

    The music industry may not like the analogue or the fact their product is just a ‘sold by weight’ commodity but that is the way it works now.

  • “I do not much care of the ‘original rights’ of the farmer whose hens laide the eggs I buy in the supermarket either. My deal is with the supermarket whose brings them to me.”

    Okay, S.I.: you’ve busted me on a word that didn’t work to distinguish between people with rights to the product and people without them. And then; it surely looks to me like you dropped the distinction.

    “If Allofmp3 can deliver the music I want to me, I am happy to pay them.”

    Now: you pick a word to make clear that Allofmp3 first is possessed of the right to make that sale, and I will most happily agree with you. Otherwise, I would point out that any number of common burglars are working all the time to “deliver” goods to people who are “happy to pay them”.

    When I picked the word “original”, it was in order to establish a condition necessary before the concept “market” could possibly be validated. And when I read what you wrote, I see no such validation, the explication of which is becoming more and more important all the time.

    And: rote assertion of “weight commodity” over an imposing Samizdata pseudonym has its charms when you hit the ‘send’ button, I’m sure, but it does nothing to address the matter of comparative value issue that I pointed out before. You must be the one with rocks in your head: you might equate examples like Bonzo Dog Band and Pink Floyd at twelve cents per drip, but you’d be running a really stupid business if you actually tried it.

  • Fact is the price for their stuff has fallen and no amount of grimacing by you will change that. Allofmp3 are paying them the price they are due for their music in Russia and I guess now that music is shown to be a fungible bulk commodity rather than a premium good the producers fondly imagined it was, the price in Russia is now the global price.

    And I see no reason why the Bonzo Dog Doodah Band should be more or less expensive than Pink Floyd. Technology may well mean the music “business” is dead and it will just go back to being the cottage industry and preserve of artists (rather than businessmen) it once was. Fine by me.

  • “…the price in Russia is now the global price.”

    Except for, of course, the five million copies of Mariah Carey’s record — again; for only a single example — that went out at the “premium” price.

    How long are you going to keep ignoring facts?

    If you really “see no reason” for variable value of artists, then I’m pretty sure that reason itself over this matter is impossible with you. But you could demonstrate the matter for yourself: sit down and record a bunch of music and then get out there and start pitching it next to the pros. Start it out at the “commodity” rate. What — twelve cents? Run that for a while, and then see how you do at six or four cents.

    Guess what: “commodities” compete in price, too.

    Hell, man. I count it a good day when I can give my music away for nothin’.

  • Except for, of course, the five million copies of Mariah Carey’s record — again; for only a single example — that went out at the “premium” price.

    And when enough people have broadband and know that there are alternatives, hardly anyone will buy CDs. It is kind of obvious really. The fact millions of people bought horses when they could have had an early car did not mean horses as a means for transportation were not on their way out.

    If you really “see no reason” for variable value of artists, then I’m pretty sure that reason itself over this matter is impossible with you.

    I know that some music is more valuable TO ME than others, but if the distrubution system for music (unlike that of different grades of coffee) does not make such distinctions worthwhile, then we are back to the “single price by weight” reality. It is just music, for gawds sake.

  • The festival of morality and justice on this thread is truly impressive! Let’s see – record companies lie, cheat and steal from artists, so the consumer should right this wrong by stealing from the artist as well, so that instead of a pittance, the musician will have nothing at all. Very high-minded, idealistic.

    “Artists have to come to terms with the reality that they need to make sure they get adequate compensation for their performance at the “point of sale”.

    That’s a typical trick of a certain subspecies of pompous fraud; don’t defend your evil and lunatic ideas on the basis of morality or reason – just portray them as (perhaps) regrettably inevitable, the “new reality” that everyone has to “come to terms” with. You can even express phony regret in the process. March of progress, new paradigm, etc

    Fact is the price for their stuff has fallen and no amount of grimacing by you will change that. Allofmp3 are paying them the price they are due for their music in Russia and I guess now that music is shown to be a fungible bulk commodity rather than a premium good the producers fondly imagined it was, the price in Russia is now the global price.

    And I see no reason why the Bonzo Dog Doodah Band should be more or less expensive than Pink Floyd. Technology may well mean the music “business” is dead and it will just go back to being the cottage industry and preserve of artists (rather than businessmen) it once was. Fine by me.

    Ah, the ignorant, philistine contempt of the nekulturny computer nerd – a fucking electrician with delusions of grandeur – for any artist. You know, anybody could do that stuff. Writers just transcribe their daily life to write novels. They could write a program to do all that – art, music, literature – anything. Anybody who charges more than 12 cents a song is just a fraud, pushed on the ignorant masses by evil music companies with hypnotic advertising. But Mr. Fucking Systems Administrator – he sees through all that. (I’m indulging in a little sterotyping here – but I’m probably not too far off)

    It’s convenient to hold the position that there is no such thing as intellectual property when you produce nothing of any intellectual value yourself.

  • “The fact millions of people bought horses when they could have had an early car did not mean horses as a means for transportation were not on their way out.”

    That’s true.

    But they bought them, nonetheless.

    “It is just music, for gawds sake.”

    That must be the reason why Edgar Varese has been a worldwide smash for the past hundred years.

    (laff)

  • John,

    I’m a “computer nerd” who has nothing but respect for artists of all kinds and I readily admit that I don’t have a musical or artistic bone in my body. No one should steal from artists, but artists shouldn’t expect to have monopolies of publishing granted and enforced by the state at everyone else’s expense.

  • As a Russian resident I could use this service without legal qualms. However, I am concerned that the independent payment service appears to be Russian owned too, that its link to Visa (suggesting Visa approval) is broken, and that PayPal payments are “temporarily unavailable”. Given that my only option is to give my credit card details to a stranger (and given that I have suffered credit card fraud before) I am not prepared to take the risk.

  • Iomegaman

    Well as a someone slightly connected to the recoridng industry, the commodity price thing is disheartening.

    But by the same token the industry has been raping itself for years especially when corporate mofo’s like “clearchannel” keep artist like Peter Gabriel obscured from the general listening public.

    I’m not sure “creativity by the pound” is gonna fly, but it sure as hell ain’t causing the RIAA’s Titanic to sink any slower.

    There is a certian element of “marketing by the pound” that I would fairly love to see dismantled.

    Working in the industry I can count on one hand the number of true artist who have not been “Madison Avenued” and “autotuned” via some crappy program to perfection, yet who couldn’t sing thier way or write thier way out of a wet paper bag.

    Maybe the day of the travelling minstral is back.

    But who’s King?

  • polandman

    So what’s next in the story of the infamous music site? Well, Michael on Techcrunch has this quote to offer:
    “We’re just relocating the servers.”
    so now i use lavamus.com they take paypal too

  • Polandman, then Techcrunch is mistaken. Allofmp3.com’s servers are working just fine and have been for quite some time.